Mile Zero

March 3, 2009

The irony of the Internet and mobile communications, which link us together in what village idiot Tom Friedman calls a "flat" world, is that the promise of them is so poorly kept. Much has been made of mobile phones--with or without Internet access--as a "leapfrogging technology. And some businesses have leapt at that opportunity: Visa, for example, looks at the microcredit market and salivates like a trained dog. But there's a blind spot the size of Africa for most handset manufacturers, it seems. Samsung only lists South Africa for the continent on its website. Motorola files Africa under "other" on its net sales figures with 8% of the total (a category that I suspect also includes large chunks of South America). Apple--well, the iPhone's been subsidized in a lot of countries now. But I've got a feeling it's priced a bit out of the range of many consumers in the Global South. Like its competitors, its business model is flashy connections for rich people.

The one company clearly not ignoring the bottom of the pyramid is Nokia, which sells hundreds of millions of phones every year on a range from Symbian superphones like the N and E series to bottom-line models aimed at "emerging markets." Nokia doesn't get a lot of respect in the US, partly because its marketing is stunningly bad and partly because its S60 devices are not typically offered by American carriers. But the company sells hundreds of millions of simple, durable phones to developing markets, markets which Nokia specifically targets (features like multiple phone books, for instance, aren't particularly useful here but make a lot of sense where the phone may be shared or rented out). They're doing a lot of research on sustainability and use--Nokia researcher Jan Chipchase's blog is a fascinating glimpse into real-world uses of mobile tech. The company funds a number of projects for mobile innovation. And they've recently shown signs of trying to pitch themselves as a service provider for people in lesser-developed economies: their Ovi portal just rolled out a free e-mail app aimed at first-time users that requires no computer for set-up or use at all.

At the same time, Nokia recently announced a program it calls "Life Tools", a set of informational and educational services powered by SMS instead of GPRS (or, as we might expect in the USA, EDGE and 3G packet data). To start, the program will distribute market and weather information to farmers, and it will include English language training. A section for ringtones and astrology is also included, although it's obviously given less emphasis in the press release.

Although top-down technology projects like this rarely work, in my experience, this is honestly a pretty impressive attempt at addressing development problems with mobile tech. It's affordable, reliable, and relevant to the needs of customers (something which I'm not convinced OLPC ever understood). Design in Africa says that "Nokia shows how its done once again" while Kiwanja's Ken Banks is a bit more reserved. Banks raises a couple of good cautionary points that had also occurred to me--but let's come back to that in a minute.

First, let's look at what Nokia's doing right here. At the most basic level, they've admitted that there are parts of the world outside of the G20, which (as I noted above) is surprisingly rare. It's particularly surprising considering that the bottom of the pyramid (or BoP, as practitioners call it) is where the next big consumer segment will probably emerge. I mean, if you sell to the developed countries, these have become a pretty saturated market. Everyone's already got a phone here. That means you have to compete on shiny features and high-powered hardware, which is a turbulent place to be--just ask Motorola, who have been coasting on the RAZR for four years now, to ever-decreasing results.

Not only that, but the developing world's an excellent place to foster innovations that might also be profitable in rich countries. As Ethan Zuckerman is fond of saying, if it works in Africa, it'll work anywhere. It's easy to see how Nokia might be hoping to roll what it learns about building cheaper, sustainable, and more reliable electronics into its higher-end projects.

Software is less likely, of course, to move from lesser-developed countries to their rich counterparts. But give Nokia credit for embracing (sometimes, at least) open source technologies and relatively open ecosystems. All kinds of hardware can be attached to their phones, from keyboards to sensors to Wiimotes. They're simple to extend and program using Python, Javascript, Java, or C. The browser is WebKit, and they've got a port of Apache, believe it or not. You can install software on the phone without a computer, straight from the web or via SMS link. And no-one's acting as a gatekeeper or bottleneck: while the Symbian Signed initiative is a major misstep (one that will likely be remedied when the OS is open-sourced in 2010), in my opinion it's still better than a walled garden app store. In other words, although they may seem primitive to Americans, they're relatively open, cheap platforms for innovation and problem-solving.

Above all, Nokia actually seems to be interested in being a better global citizen, not just a better market player, which is one of the reasons I'm such a huge fan of the company. Granted, purely in business logic, being pro-development and pro-environment makes sense for a company: it's more profitable selling phones to people who possess money and health. Still, Nokia's entry into development still makes me nervous. I want to give it the benefit of a doubt and hope for the best, but caution still seems advisable for several reasons.

First of all, let's be frank: Western corporations don't have a great track record in development. I'll never forget what one African said at a conference I helped run while at the Bank: "These countries are not poor," he admonished the development institutions in attendance. "They were impoverished." And indeed, the history of interference from large companies has not been a happy one, from the controversy surrounding Nestle's infant formula to the use of military forces by Shell in Nigeria. Moreover, the influence of multinational companies on graft and bribery should not be discounted: while it is certainly a good governance issue, those who pay the bribes--and reap the benefits--need to be held accountable as well, if not more so.

There's a genuine reason, then, to be cautious whenever a company announces that it's making a major push into lesser-developed economies. The exploitation and damage that could be done--that has been done--is immense. And even with the best of intentions and smart people behind a project, the possibility for unforeseen consequences wrecking havoc among those least able to defend themselves is unsettling. Take it from someone who used to be a peon at the World Bank: having smart, well-intelligent personnel is no guarantee of success (or anything else, for that matter).

Ken Banks raises another cautionary point: Nokia's setting itself up to potentially control a massive amount of the information technology space, including most of the vertical infrastructure (services, software, and hardware). How far will they go with that kind of power? As Banks speculates, could they also integrate mobile payment systems, capturing that market? Will they partner with local services, or will they steamroller over them? The ability to integrate and share innovations is a powerful one--for development, for Nokia's bottom line, or both. If the future is built on proprietary Nokia tech, there's potential for lock-in rivalling anything that Microsoft, Google, or Apple could have ever hoped for.

I don't care for the fact that so much of this comes down to trust. Do I trust Nokia to keep doing good? Can we trust a company to act honorably when they've got real incentives to cut corners for profit? Can they be trusted to remain open when it counts? Noticeably, Nokia's open source initiatives are oriented a bit more toward their high-end customers than their emerging market phones. Optimally, I think we'd all like to see development from the bottom up, with local companies profiting. At the very least, competition would be good--and Nokia could be seen as simply working for competitive advantage in a marketplace soon to boom. As I've said, there are perfectly valid, harmless reasons for them to be there.

But as long as they're the only big handset manufacturer who's even really thought about selling to the BoP, instead of using low-end to build mindshare in developed countries, we won't really know the answers to those questions. That strikes me as a troubling state of affairs. There are worse companies to be taking these steps, I think, and yet that's small comfort given what's at stake.

Future - Present - Past